Colliers International: Global Office Markets Search for Economic Equilibrium
New Global Office Research Report Indicates that Many Markets are Experiencing
Stability for the First Time in Several Years
SEATTLE, June 4, 2013
SEATTLE, June 4, 2013 /PRNewswire-USNewswire/ -- According to a new Global
Office report by Colliers International, global markets are aiming for a state
of economic equilibrium between supply and demand after weathering challenges
in China, the U.S. and Europe. While some markets appear to still be lagging,
the majority are experiencing more stability than they have in some time.
"Office markets around the world have survived the challenges of a slowing
Chinese economy, a mixed American recovery, and a European market that is
still finding its economic footing," said James Cook, Director of Research at
Colliers International. "Now, for the first time in several years, we're
experiencing balance on a global level."
Colliers experts point to several key trends in 2013 that underscore this
search for equilibrium:
United States and Canada: Strength in the ICEE (intellectual capital, energy
and education) markets will remain the primary driver of office-using
employment growth through this year, with the vacancy rate improving to nearly
14 percent in the first quarter of 2013, dropping for the fifth consecutive
quarter. Meanwhile a strong rebound in the for-sale housing market is poised
to benefit U.S. suburban office markets in 2013 a variety of service providers
open offices and resume hiring to cater to new developments, particularly in
hard-hit markets like Phoenix, Las Vegas and parts of Florida.
Mexico City: Office development is strong, with 20 new buildings developed in
2012, 54 more under construction in the first quarter of 2013, and a 17
percent increase in absorption. In the next five years, Mexico City's office
inventory is expected to increase by about 3.2 million square feet, but with a
stable vacancy rate, the market should have enough absorption to fill the new
Beijing: While demand for Class A space decreased in the second half of 2012
and absorption also decreased significantly, overall rental rates still grew
by nearly 20 percent. Demand is expected to remain largely stable for the
remainder of 2013.
Sydney and Melbourne: Domestic investment has doubled since 2011, now making
up 78 percent, and is expected to remain strong. The leasing market remains
slow despite tightening vacancy rates, positive absorption and rental growth,
with most activity focused on lease renewals and consolidations. In Melbourne,
a lack of business confidence has led to a slowdown in demand and tenant
commitment. However, Colliers experts expect certainty to return to the market
and drive demand in 2014.
Mumbai: Office absorption rose through 2012 despite occupier caution, with
demand driven by the banking, financial services, insurance and IT industries.
Colliers expects healthy demand to continue in 2013 with The Andheri, BKC, and
Lower Parel submarkets the preferred destination due to availability of Class
Europe: While the threat of a Eurozone break-up has diminished, the European
office market continues to operate at a slow pace, with pockets of rental
growth in parts of Northern Europe like Germany and the Nordics, and rental
weakness across most of Southern Europe and some fringe Central and Eastern
markets. In Germany, occupier demand began rising in the first quarter of
2013, while demand in Paris is expected to stabilize this year.
The report also covers South American markets Sao Paulo, Rio de Janeiro,
Buenos Aires, Bogota and Lima; Asian markets Beijing, Shanghai, Hong Kong,
Tokyo and Seoul; Australian markets Adelaide, Auckland and Wellington;
Indonesian markets Singapore, Taipei and Makati; Indian markets Mumbai, Delhi,
Bangalore and Chennai; as well as European markets Germany, Paris, London,
Manchester and Dublin.
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